Among the A-share companies in apple (AAPL) industry chain, huanxu Electronics (601231. SH) is a representative one. Apple’s share price plummeted because sales were not as good as expected, which dragged huanxu electronics to close with a down limit on October 30. Although the first three quarters maintained performance growth, huanxu Electronics was worried about the sharp increase in inventory, construction in progress and net cash flow from operating activities (hereinafter referred to as “operating cash flow”). < p > < p > on October 30, Apple released its fourth fiscal quarter (end June to end September) results of fiscal year 2020, with iPhone revenue of $26.44 billion, a year-on-year decrease of $6.92 billion or – 20.7%. Overall, Apple’s revenue was 64.698 billion US dollars, up 1% year-on-year; net profit was 12.673 billion US dollars, down 8% year-on-year. The main products of huanxu electronics include communication products, computer motherboards, storage, peripheral products and industrial electronic products. At present, it has 10 production bases in the world, serving the world’s famous brand manufacturers. < p > < p > according to the company’s third quarter report, huanxu electronics realized 29.479 billion yuan of business revenue from January to September, with a year-on-year growth of 13.51%; in the third quarter, it realized a revenue of 12.462 billion yuan, a year-on-year increase of 9.63% and a month on month growth of 32.51%. In the first three quarters, the revenue of communication products increased by more than 30% year-on-year, which was the main factor driving the overall revenue growth of the company; the revenue of consumer electronics products and storage products continued to grow; the revenue of computer products, industrial products and automotive electronic products decreased year on year; but the revenue of industrial products in the third quarter showed a steady decline, with a year-on-year growth of about 9%. The gross profit margin of huanxu electronics in the first three quarters was 10.03%, an increase of 0.13 percentage points year-on-year. From January to September, the net profit was RMB 995 million, up 15.62% year on year. The net profit attributable to shareholders of the listed company after deducting non recurring profit and loss was 901 million yuan, with a year-on-year increase of 25.78%. Among them, the third quarter entered the peak season of shipment, with a net profit of 495 million yuan in a single quarter, a year-on-year increase of 5.10% and a month on month increase of 59.27%. < p > < p > although both revenue and net profit have increased, huanxu electronics is not optimistic in terms of inventory, construction in progress and operating cash flow. With Apple’s sales declining, huanxu electronics’s inventory scale has increased significantly, and its production capacity is also expanding by a large margin. For the company’s management, how to “de stock” may become a problem. According to the balance sheet, the inventory at the end of September 2020 increased by 69.03% compared with that at the end of 2019 to reach 7.265 billion yuan, mainly due to “the increase of material preparation in advance to meet the demand of customers’ orders and the increase of products to be delivered at the end of the period”; the construction in progress increased significantly by 125.43% to 507 million yuan at the end of the quarter, mainly due to the expansion of production capacity and new equipment and production lines in the current period. In terms of operating cash flow, the company’s operating cash flow in the first three quarters was -222 million yuan, compared with 342 million yuan in the same period of 2019. The company explained that “it was mainly due to the substantial increase in inventory at the end of the period”. On the other hand, “net cash flow from financing activities” increased by 273% to 1.006 billion yuan, “mainly due to the group’s overseas investment projects in the current period and the increase of loans from overseas subsidiaries”. < p > < p > a well-known public fund manager in South China told the first finance and economics reporter that Apple’s sales grew faster in the quarter from April to June, mainly due to the spread of overseas epidemic, more home-based situations, and the increase in demand for online courses, meetings and communication, which accelerated the performance growth of technology stocks and the demand for electronic products increased significantly. After the formation of high base sales in this quarter, it is expected that the growth rate of electronic products sales will slow down for some time in the future. < / P > < p > it is still difficult to judge whether Apple’s new products can lead to a rebound in sales, which also has certain uncertainty for the whole industry chain in the future. It is not clear whether huanxu electronics, a fast expanding enterprise, will have excess capacity. “Apple is relatively friendly to suppliers. Apple’s industrial chain is a hotbed for bull stocks. Apple also hopes that suppliers will have more R & D investment to improve product quality.” The fund manager said. Zheng Biyu, an analyst at Guojin securities, has an optimistic view. Zheng Biyu said that the net interest rate of huanxu electronics in the third quarter was 4.0%, and the RMB appreciated sharply in the third quarter. The settlement loss caused by different turnover cycles of raw materials and finished products reduced the company’s profit in the third quarter. In the future, with the negative impact of exchange rate fluctuation weakening, it is expected that the fourth quarter’s revenue will increase month on month. < p > < p > in the first three quarters, the financial expenses of huanxu electronic reached 55.15 million yuan, an increase of more than five times over the same period of last year. The company explained: “mainly due to the increase in interest expenses and the exchange loss caused by the appreciation of RMB against the US dollar in the current period.” < p > < p > on October 28, in response to investors’ inquiries, the person in charge of huanxu electronics said that the company’s business income accounted for more than 80% in areas outside the mainland of China, and the main transactions were US dollar quotation. The company has always been paying close attention to the exchange rate fluctuation and conducted necessary hedging operations for the difference of US dollar receipt and payment. In the future, the company will continue to pay attention to it and take necessary measures to minimize the impact of exchange rate changes on the company. More Samsung devices can now run Android applications on PC through your phone